Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to load up your portfolio with some small-cap companies because of their superior growth potential and would like to focus on those that have actually been growing briskly, the Vanguard Russell 2000 Growth Index ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The Vanguard ETF's expense ratio -- its annual fee -- is a very low 0.20%. (Vanguard is known for low fees.) The fund is very small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
At roughly one year of age, this ETF is far too young to have its performance assessed. And as with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
What's in it?
Plenty of small-cap companies had strong performances over the past year. Ariad Pharmaceuticals
Personal care products maker Nu Skin
Kodiak Oil & Gas
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Oil and gas exploration and production company Energy XXI
The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.
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Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, holds no position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.